Washington, D.C. – House Majority Leader Kevin McCarthy (CA-23) appeared on CNBC’s Squawk Alley to discuss the Tax Cuts and Jobs Act—major legislation that will produce a fairer tax code, grow the economy, and benefit all hardworking Americans.
Excerpts of the interview are below, or watch online here.
On the House meeting with President Trump this week:
“We’re united going forward–we’re giving tax cuts, creating jobs, and we’re making America more competitive.”
On key provisions that will boost innovation and entrepreneurship:
“The House bill wants to make sure we stay innovative. We’ve extended the R&D tax credit, which is so important. It also defers stock options, so those employees that are taking a stock option instead of getting a salary, they can now own part of the company and they are not hit with a tax without even having the stock yet. Now they get to defer that further forward. This will create more innovation, more startups, and makes America more competitive…. I passed this portion of the tax bill off the floor last year. I chair and created the Innovation Initiative and this was one of the elements of it because we know it is good policy.”
On Congress working at full speed to get tax reform done by the end of the year:
“Think about this… the reason why the House starts first is the Constitution. Article I, Section 7 of the Constitution says all tax reform will start in the House, So we started the bill a while back. We had markup in the Ways and Means Committee all week long. It came out of Ways and Means, and then you noticed the Senate version, it’s still writing to the same rule that you talk about at $1.5 trillion. So there’s a lot of similar parameters based upon that, but inside there are some differences—the phasing in the corporate rate on the Senate side, we instantaneously go to 20%. Then the Senate will mark it up in committee this week while we pass it off the floor. They’ll come back after Thanksgiving, pass it, and then we’ll go to conference. I do not think it will take long until we come back with that final version and move that to the President’s desk in December.”
On how tax reform is already making America more competitive:
“You know, by lowering the corporate rate, you look at a company like Broadcom—Broadcom has already announced that they are going to move back to America. They started in America. They domiciled into Singapore because our tax code was too burdensome for them to compete globally. Now they’re coming back. For so long, how many stories have you had on your show of companies leaving just because of the tax code, being unable to compete? Now, we’re hearing stories of coming back. Broadcom: $20 billion a year, $6 billion they invest in manufacturing, $3 billion in just R&D. That’s the type of story we want to hear about America, and I think that’s where our tax code lets us be more competitive. And then no one has really talked about what we’re doing with repatriation and going to a territorial tax that you’ll never be taxed again on that and it will be coming back into America and investing into American companies or paying out some pretty good dividends to American shareholders.”